Rithm Capital (RITM) Closes Sculptor Capital Buyout for $719M
Rithm Capital Corp. RITM has closed the previously announced acquisition of Sculptor Capital Management Inc. for $12.70 per class A share, valuing the transaction at $719.8 million.
With the completion of the deal, Sculptor’s common stock will be delisted and stop trading on the New York Stock Exchange.
When the transaction was announced in July this year, RITM had offered a deal price of $11.15. This was subsequently amended and increased by 13.9% in October. The transaction represents a premium of 49.4% over the unaffected Nov 17, 2022, closing price of $8.50.
The deal has created a superior asset management business and strengthened Rithm Capital’s position as an alternative asset manager. The buyout also enhances the company’s private capital platform and fundraising capabilities. When the deal was announced, it was expected to be neutral to 2024 earnings and accretive to 2025 earnings.
Michael Nierenberg, chairman, chief executive officer and president of Rithm Capital, noted, “The completion of this transaction is a significant milestone for our team and an important next step in the growth and evolution of Rithm.” He added, “We are excited to bring together our talented teams and create a superior global asset management business focused on delivering significant, long-term value for our shareholders and fund investors.”
Jimmy Levin, chief investment officer and executive managing partner of Sculptor, remarked, “We are extremely happy to combine forces with Rithm. This transaction positions us for long-term success and our team is invigorated to continue our mission of providing attractive returns to our fund investors.”
Rithm Capital’s shares have gained 23.8% in the year-to-date period compared with the industry’s rise of 5.9%.
Image Source: Zacks Investment Research
The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Expansion Efforts by Other Companies
HSBC Holdings HSBC is looking to expand in Asia. In sync with this, last month, the company announced a deal to acquire Citigroup's C retail wealth management business in China.
As a result of the sale, Citigroup will transfer assets under management and deposits worth almost $3.6 billion (as of August 2023) and the associated wealth customers in 11 major cities to HSBC Bank China. Upon completion (expected in the first half of 2024), the acquired business will become part of HSBC Bank China’s Wealth and Personal Banking operations. Citigroup will retain its institutional businesses, wherein it has a preeminent position.
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